Practice Question 30


Under which of the following discounting methods will the present value of an investment be the highest, assuming the same annual interest rate?
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Quarterly.

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Monthly.

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Continuous.

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Yearly.


Practice Question 34




Which of the following is a similar concept to the compound growth rate of money?
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The yield on a bond.

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The discount rate on a capital budgeting project.

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All of these.

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The internal rate of return on an investment.


Practice Question 29




The future value of an annuity is typically used when analyzing
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loan amortization schedules.

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retirement plans.

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the price of common stock.

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alternative capital budgeting proposals.

What is the value of this 20 year lease? The first payment, due one year from today is $2,000 and each annual payment will increase by 4%. The discount rate used to evaluate similar leases is 9%. (Round to the nearest dollar.)
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$ 24,361

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$ 68,000

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$ 39,856

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$ 40,000


Multiple Choice Question 87




Time to attain goal: Elegant Designers have generated sales of $625,000 for the current year. If they can grow their sales at a rate of 12 percent every year, how long will they take to triple their sales? (Round off to the nearest year.)
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8 years

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9 years

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7 years

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10 years


Practice Question 6




You plan to buy a new car. The price is $30,000 and you will make a down payment of $4,000. Your annual interest rate is 10% and you intend to pay for the car over five years. What will be your monthly payment?
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$552.42

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$637.41

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$566.67

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$433.33
